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Consumer trust plays a fundamental role in the financial services industry.
The inherently personal nature of the products and services provided, coupled with their potential magnitude of impact, puts trust right at the center of the consumer relationship. As such, it’s not enough for financial services brands to simply talk the talk when it comes to trust—they must actively diagnose and acknowledge weak spots and constantly improve their operational mechanisms to build better trust-related outcomes.
Indeed, this is an area where many players in the financial ecosystem are struggling to meet expectations, and those struggles can be even more prominent in digital channels—where there is typically less human interaction, greater anonymity, and increased fraud risk. It’s a shortcoming that’s been further exposed post-pandemic, as consumers have increasingly embraced online channels, rendering the physical presence of a retail footprint less meaningful. To top it all off, emerging fintech apps and other non-traditional financial products and services are now flooding the marketplace, offering greater levels of convenience, choice, and flexibility.
Against this backdrop, the financial institutions (FIs) that build acceptance and trust through agile digital marketing touchpoints can better position themselves to develop stronger consumer relationships—and grow their bottom lines, to boot. Here, we discuss some key aspects of digital trust in financial services marketing and provide recommendations for how financial advertisers can strengthen that trust with consumers.
In light of privacy-minded regulations such as CCPA, CPRA, and GDPR, and with the rapid approach of the cookieless future, first-party data is becoming increasingly central to supporting a vibrant digital media advertising strategy.
For FIs with extensive product sets and revenue streams, collecting consented data and leveraging it for marketing is particularly important. It is integral to prospecting efforts, and has the potential to unlock a wave of cross- and up-selling avenues, especially when merged with second- and third-party audience data sets to create a holistic view—not just of an existing customer, but also of the types of customers an FI wants to acquire within a particular product type. This level of data activation can inform a highly measurable approach to media buying.
The caveat here, however, is the handling of this data. When it comes to anonymizing and cleaning these data sets, FIs must be nothing short of immaculate. A massive 75% of consumers are not comfortable making a purchase from a brand that has poor personal data ethics. With the stakes so high—and awareness of these issues continually growing—the way FIs collect, store, curate, and activate consumer data, and handle privacy, can become a point of differentiation. Companies must be vigilant, communicate transparently, and lean on experts to support this evolution and create future-proof data infrastructure.
How financial institutions leverage targeting mechanisms for a digital marketing campaign is only one piece of the advertising puzzle, but it’s one that deserves some dedicated attention and consideration. Oftentimes, FIs can be overly focused on the review and internal alignment of messaging and creative communications, all of which must go through a rigorous legal compliance review before they’re pushed out the door (and for good reason!). But now, with consumer targeting under the federal microscope, brands will need to be just as focused on the specific ways they reach their consumers—and this, in turn, may require changes to some well-established processes.
One example of this intensifying regulatory scrutiny is the Consumer Financial Protection Bureau’s (CFPB) interpretive rule concerning behavioral targeting through digital media (ruling in full here). In short, it says digital marketers acting as service providers “can be held liable by the CFPB or other law enforcers for committing unfair, deceptive, or abusive acts or practices as well as other consumer financial protection violations.” With this in mind, FIs must now look much closer at service provider compliance (for example, with agencies) and the platforms and systems they use to distribute messaging.
Consumers expect FIs to employ high ethical standards with both their communications and their targeting methods. For a long time, everyone simply placed trust in their agencies, the big channels, and the big technologies to do the targeting part of that mix for them. This approach, however, is no longer acceptable. The CFPB ruling may be somewhat cloudy, but it is shining a spotlight on the need for a more tightly intertwined media buying process in the financial industry so that advertising is executed in a way that builds trust with target consumers. This is pivotal for all FIs, but especially important for regional and smaller institutions, as trust in their local communities is core to their success.
The consumer is queen (or king) in the digital world, and perhaps nowhere does this ring truer than in the financial space, where experiences and brand perception are increasingly assuming greater significance. This means financial advertisers must approach growth differently—in a way that restructures how they plan, optimize, and report.
Having a full range of features and products is table stakes for FIs, but today, many of those individual offerings now sit disconnected in silos. This presents a massive headache for marketing organizations in a space where experiences are no longer a differentiator when it comes to trust, but instead a crucial aspect of maintaining it. FIs, especially the old incumbents, need to focus on breaking down those silos to determine what is right for the consumer and repairing their reputations at a brand level—rather than, say, revolving their strategies around marketing the next new innovative product.
This is rooted in embracing the power of brand loyalty and brand reputation, establishing a presence in the marketplace and acquiring consumers before they even reach their purchase point. It’s no easy feat to achieve, though—not when there are emerging tools and apps that have a leg up in this conversation because they’re not immediately stymied by the stigma that is “big banks,” or when technology juggernauts like Google and Apple are entering the financial realm with an abundance of consumer data, best-in-class user experiences, and already-comprehensive operating mechanisms.
This competitive landscape requires traditional FIs to evolve, as the long-term operational and product expertise that at one point was an advantage has been eclipsed by neo-fintech. Younger generations, in particular, are increasingly distrustful and wary of the traditional institutions for fear of being exploited through hidden fees and other deceitful tactics (something else the CFPB is tackling, by the way!) The digital revolution has put FIs on a collision course with a range of newer, nimbler rivals, and to stand a chance, they will need to reframe their strategy to prioritize branding over product and more effectively meet the omnichannel experiences consumers now expect.
Over the past several years, there’s been a notable increase in digital ad spending in the financial services industry: From 2019 to 2023, digital ad spending grew from $18.07 billion to $30.02 billion. That’s an increase of over 66%! And investment in digital channels is forecast to continue to grow in the coming years, making it critical that marketing teams carefully consider just how they’re leveraging different digital channels to connect with audiences.
For example, FIs might use channels like digital out-of-home and connected TV to build broad awareness of their brand. Additionally, FIs might use first-party data to reach specific audiences relevant to a product or service across digital video and/or display. They could then lean into digital video and digital audio advertisements—which make it easy to elevate customer stories and experiences in their own words—to deepen trust with prospective audiences. By strategically leveraging these diverse channels, advertisers can create a seamless omnichannel experience that fosters connection with customers, enhances brand presence, and results in product and customer growth.
However, these digital channels come with their own challenges, and one of the biggest for FIs is applying them in a way that prioritizes brand safety. This is especially true of social media, where advertisers have less control over the comments and content that shows up near their ads. For an industry as personal as financial services, there are few things more damaging to brand trust than having your content appear alongside misinformation, disinformation, or hateful/harmful content.
To address this challenge and ensure their use of digital channels builds—rather than erodes—trust, FIs must have a strong brand safety plan in place. Such plans should include proactive elements like blocklists or allowlists, topic exclusions, or sensitive subject exclusions, which can help ensure ads aren’t displayed alongside questionable, misleading, or controversial content. These plans should also include specifics on how advertisers will keep an eye on their campaigns and make adjustments to ensure brand safety is prioritized (for instance, by monitoring posts, comments, and other activity on social media). By building a brand safety plan into their digital marketing strategy, FIs can craft meaningful advertising experiences for customers that deepen trust over time.
Inspiring consumer trust must be an ongoing priority for financial institutions. It’s not something FIs can achieve via one-off campaigns, but instead through the effective installation and utilization of robust data infrastructure, ethical targeting and digital marketing compliance in a stormy regulatory environment, a sharp focus on brand perception over pursuing shiny new products, and the strategic use of digital channels in a way that prioritizes brand safety.
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For financial institutions, a significant part of building trust with consumers is listening and adapting to their needs. And with consumers demanding data privacy, leveraging privacy-friendly advertising solutions is a must for FI brands.
Want to learn more about how to secure consumer trust via privacy-compliant advertising? Our guide, Beyond Third-Party Cookies: Your Guide to Privacy-Friendly Advertising, covers everything marketers need to know.
The financial services industry is undergoing massive disruption.
The growing presence of innovative fintech and big tech companies, rising consumer demand for more efficient ways to manage finances, and tightening regulatory attitudes—not to mention inflation and rising interest rates—are all impacting how media buyers can operate in the finserv landscape. To chart a path through the current fog of uncertainty and position for a bright future, financial marketers should lean on smarter operational efficiency and focus on regulatory compliance.
Here are two trends to watch for:
The advancement of targeting and measurement mechanisms will impact channel planning within the prospect ecosystem in a big way. Take connected TV (CTV), for example—a channel that has historically been used for awareness and enhancing brand perception. Now, as we move into 2023, financial institutions that can pair sound data utilization infrastructure with advanced measurement capabilities will set themselves up to bifurcate CTV strategies in a way that delivers both awareness and acquisition. And this can just be a starting point—it is an approach that can easily expand into programmatic, video, social, and other addressable media vehicles.
Another significant area of interest in financial services is the intensifying scrutiny on targeting mechanisms within digital media. This comes on the back of a recent Consumer Financial Protection Bureau (CFPB) ruling that holds digital advertisers and service providers liable when digital media targeting may violate practices outlined in the Consumer Financial Protection Act (CFPA). It highlights the need for finserv companies to be in lockstep with their agencies to ensure they are reviewing and approving audience targeting strategies with the same rigor as communications and messaging.
So, what should finserv advertisers be thinking about heading into 2023? In short: by harnessing the right measurement technology and taking a customer-obsessed approach to targeting, financial institutions can maneuver to gain a competitive advantage and win consumer trust.
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Want to learn about some of the macro trends affecting digital marketing more generally? Check out our 2023 Trends Report to stay ahead of the curve as you plan for the year ahead.